Earnings call transcript: Oil States Q2 2025 sees stable EPS, revenue miss

Published 31/07/2025, 18:40
Earnings call transcript: Oil States Q2 2025 sees stable EPS, revenue miss

Oil States International (OIS) reported its Q2 2025 earnings, revealing stable earnings per share (EPS) of $0.09, matching analyst forecasts, while revenue fell short at $165 million against a forecast of $170.74 million. The company’s stock experienced a slight pre-market gain of 0.36% but saw a significant decline of 12.61% in regular trading, closing at $5.63. According to InvestingPro analysis, the company maintains a GOOD financial health score, with particularly strong metrics in cash flow management.

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Key Takeaways

  • Oil States’ EPS met expectations at $0.09.
  • Revenue fell short of forecasts by $5.33 million.
  • Stock price dropped 12.61% post-earnings.
  • Offshore and international projects contributed 72% of revenue.
  • The company revised its full-year revenue guidance to $685-$700 million.

Company Performance

Oil States International’s performance in Q2 2025 was characterized by steady earnings but a revenue miss. The company continues to leverage its strong presence in offshore and international markets, which accounted for a significant portion of its revenue. Despite macroeconomic uncertainties and OPEC+ production cuts, Oil States maintained resilience in its offshore operations.

Financial Highlights

  • Revenue: $165 million, down from the forecast of $170.74 million.
  • EPS: $0.09, matching forecasts.
  • Adjusted Consolidated EBITDA: $21 million.
  • Net Income: $3 million ($0.05 per share).
  • Free Cash Flow: $8 million.

Earnings vs. Forecast

Oil States reported an EPS of $0.09, meeting analyst expectations, while revenue came in at $165 million, missing the forecast by $5.33 million or 3.12%. This revenue shortfall reflects challenges in the U.S. Land market, impacted by a decrease in drilling rig and frac spread counts.

Market Reaction

Following the earnings announcement, Oil States’ stock saw a pre-market increase of 0.36% but closed down 12.61% at $5.63. This decline reflects investor concerns over the revenue miss and broader market pressures. With analyst price targets ranging from $5.50 to $9.00, and a beta of 1.82 indicating higher market sensitivity, the stock presents both opportunities and risks. The company’s Price-to-Book ratio of 0.51 suggests potential undervaluation relative to its assets.

Discover more detailed valuation metrics and expert analysis in Oil States International’s comprehensive Pro Research Report, available exclusively on InvestingPro, along with 1,400+ other top US stocks.

Outlook & Guidance

Oil States revised its full-year revenue guidance to $685-$700 million and expects EBITDA between $88 and $93 million. The company anticipates Q3 2025 revenue to range from $165 to $170 million, with EBITDA projected at $21 to $23 million. Management remains optimistic about improving margins in 2026.

Executive Commentary

CEO Cindy Taylor emphasized the company’s focus on innovation and strategic capital allocation. "We are investing in innovation that provides meaningful advancements to customer operations," she stated. Taylor also highlighted the company’s strong backlog and market leadership in Downhole Technologies.

Risks and Challenges

  • Macroeconomic uncertainty and OPEC+ production cuts could impact future revenues.
  • U.S. Land market challenges persist with decreasing rig and frac spread counts.
  • Potential supply chain disruptions could affect operational efficiency.
  • Competitive pressures in the offshore market may affect market share.
  • Fluctuating oil prices could influence profitability and investment decisions.

Q&A

During the earnings call, analysts inquired about the stability of offshore projects and the impact of tariffs. Management reassured investors of minimal tariff effects and a continued focus on optimizing U.S. Land operations. The company expects its book-to-bill ratio to remain above 1.0 for the rest of 2025, indicating sustained demand for its services.

Full transcript - Oil States International Inc (OIS) Q2 2025:

JL, Conference Operator: Thank you for standing by. My name is JL, and I will be your conference operator today. At this time, I would like to welcome everyone to the Oil States Second Quarter twenty twenty five Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session.

I would now like to turn the conference over to Ellen Pendleton, VP of Human Resources. You may begin.

Ellen Pendleton, VP of Human Resources, Oil States: Thank you, JL. Good morning, and welcome to Oil States’ second quarter twenty twenty five earnings conference call. Our call today will be led by our President and CEO, Cindy Taylor Lloyd Hodgesch, Oil States’ Executive Vice President and Chief Financial Officer and Scott Moses, our Executive Vice President and Chief Operating Officer. Before we begin, we would like to caution listeners regarding forward looking statements. To the extent that our remarks today contain information other than historical information, please note that we are relying on the safe harbor protections afforded by federal law.

No one should assume that these forward looking statements remain valid later in the quarter or beyond. Any such remarks should be weighed in the context of the many factors that affect our business, including those risks disclosed in our 2024 Form 10 ks along with other recent SEC filings. This call is being webcast and can be accessed at Oil States’ website. A replay of the conference call will be available two hours after the completion of this call and will continue to be available for twelve months. I will now turn the call over to Cindy.

Cindy Taylor, President and CEO, Oil States: Thank you, Ellen. Good morning, and thank you for joining our conference call today, where we will discuss our second quarter twenty twenty five results and provide our thoughts on market trends in addition to discussing our company specific strategy and outlook. In a quarter marked by geopolitical instability, lower crude oil prices and fluctuating U. S. Trade policies, offshore and international markets demonstrated resilience.

With this backdrop, the company performed well, achieving the midpoint of our guided EBITDA range for the 2025 due to our product and service mix. Our consolidated results in the second quarter were driven by continued strength of international and offshore activity supported by backlog growth over recent quarters. Oil States remains well positioned to benefit going forward as oil and gas operators favor capital allocation to offshore projects with higher production, slower decline curves and lower breakevens. During the second quarter, 72% of our consolidated revenues were generated from offshore and international projects, up significantly sequentially and year over year. This shift in revenue mix reflects our strategic actions to grow our international project driven revenues as well as our continuing initiative to optimize our U.

S. Land operations given lower industry activity levels and competitive market dynamics. U. S. Land drilling and completion activity declined significantly during the period with the quarter end rig count down 8% and the frac spread count down 14% from 03/31/2025.

These U. S. Activity reductions stemmed from weaker crude oil prices driven by ongoing macroeconomic uncertainty and OPEC plus decision to rapidly unwind over 2,000,000 barrels per day of previous production cuts. The sustained margin benefit stemming from our U. S.

Land based optimization efforts, which were initiated in 2024 and have continued into 2025 are reflected in our results, albeit tempered by the significant decline in U. S. Oil directed activities during the second quarter. Driven by strong demand across our international and offshore markets, our offshore manufactured products segment delivered strong performance. Revenues increased 15% sequentially, while adjusted segment EBITDA rose 18%.

Backlog increased to $363,000,000 again allowing us to achieve our highest level since September 2015. Robust bookings of $112,000,000 reflective of continued strength in offshore project activity yielded a quarterly book ratio of 1.1 times and a year to date ratio of 1.2 times, reinforcing our sustained backlog build. The strength and diversity of our backlog supports our outlook for total company incremental revenue and earnings growth over the balance of 2025. Our Completion and Production Services and Downhole Technologies segments, which represent a smaller portion of our business mix, experienced sequential quarter revenue declines of 1510%, respectively, primarily due to the significant industry wide reduction in U. S.

Land based activity levels. Responsive to market conditions, we made the strategic decision to exit three additional land based facilities during the second quarter and to further reduce our U. S. Land focused workforce. During the second quarter, we grew our cash flow from operations 61% sequentially, and we generated $8,000,000 of free cash flow.

Free cash flow together with cash on hand was used during the quarter to repurchase $7,000,000 of our common stock and $15,000,000 of our convertible senior notes. Our deleveraging efforts should unlock additional equity value to our stockholders as we approach net debt zero and pay off our convertible senior notes at their maturity in April 2026. Our capital expenditures in the second quarter were elevated by the ongoing construction of our new manufacturing facility in Bataan, Indonesia, which will complete in the third quarter along with the manufacturer of our low impact workover rental riser equipment built pursuant to contracts. We are committed to optimizing our operations and making targeted investments in our highest performing operations while leveraging cutting edge technologies to drive growth. Our commitment to technology and innovation was once again honored with a 2025 meritorious engineering award from Harte Energy, recognizing our low impact workover package, which I mentioned earlier.

This solution integrates proven field technologies to enhance subsea plug and abandonment operations while ensuring the integrity of aging wells. Lloyd will now review our operating results along with our financial position in more detail.

Lloyd Hodgesch, Executive Vice President and CFO, Oil States: Thanks, Cindy. Good morning, everyone. During the second quarter, we generated revenues of $165,000,000 and adjusted consolidated EBITDA of $21,000,000 Net income totaled 3,000,000 or $05 per share, which included facility exit, severance and other charges and credits totaling $3,000,000 Our adjusted net income totaled $5,000,000 or $09 per share after excluding these charges and credits. Our Offshore Manufactured Product segment generated revenues of $107,000,000 and adjusted segment EBITDA of $21,000,000 in the second quarter. Adjusted segment EBITDA margin was 20% in the second quarter compared to 19% in the first quarter.

In our Completion and Production Services segment, we generated revenues of 29,000,000 and adjusted segment EBITDA of $8,000,000 in the second quarter. Adjusted segment EBITDA margin was 28% benefiting from facility and equipment sale gains in the second quarter compared to 25% in the first quarter. During the quarter, the segment recorded facility exit and other restructuring charges totaling $2,000,000 In our Downhole Technologies segment, we generated revenues of $29,000,000 and $1,000,000 of adjusted segment EBITDA in the second quarter. During the quarter, the segment recorded a non cash operating lease and asset impairment charge of $1,000,000 as well as severance charges. We generated $15,000,000 of cash flow from operations in the second quarter.

Our cash flows were used to fund $10,000,000 of CapEx, which was offset by $3,000,000 in proceeds from the sale of idle properties and equipment. During the quarter, we repurchased $7,000,000 of our common stock under our current share repurchase authorization. In addition, we purchased $15,000,000 of our convertible senior notes at a slight discount. As a testament to our strong financial position as of June 30, we maintained a solid cash on hand position with no borrowings outstanding to the company’s asset based revolving credit facility. On July 28, we amended our revolving credit facility to provide for additional borrowing availability to lower interest charges and to plan for the retirement of our remaining convertible senior notes at maturity in April 2026.

We intend to remain opportunistic with additional purchases of our common stock and convertible senior notes given our solid free cash flow outlook and we’ll continue to prioritize returns to stockholders. Now Cindy will offer some market outlook concluding comments.

Cindy Taylor, President and CEO, Oil States: Despite recent economic volatility and the imposition and uncertainty around new trade tariffs, we continue to see strong demand for our offshore and international products and services. Our backlog remains at a decade high level, and we anticipate continued strength in future bookings and have confidence in our offshore project execution. Industry analysts have suggested that while U. S. Land based activity may remain subdued, offshore and international markets are expected to lead upstream growth.

Analysts have also highlighted a global pivot towards exploration and offshore development driven by the need for lower cost, lower carbon resources. As it relates to guidance based on what we know today, we are maintaining our full year EBITDA guidance in a range between 88,000,000 to $93,000,000 However, our revenue guidance needs to be updated for the streamlining of our U. S. Land operations, which will reduce our full year revenue range to $685,000,000 to $700,000,000 Our margins will improve with the high grading of our business mix along with cost reduction initiatives. Our third quarter guidance calls for revenues in a range of $165,000,000 to $170,000,000 and EBITDA of 21,000,000 to $23,000,000 Strong projected cash flow from operations, which are still expected to be in a range of 65,000,000 to $75,000,000 for the full year underscores Oil States free cash flow yields, which was one of the most attractive across our peer group.

Our business mix and capital allocation strategies are purpose driven. We are investing in innovation that provides meaningful advancements to customer operations, driving solid results through project execution, generating significant cash flow that strengthens our balance sheet while unlocking equity value for our stockholders. At the same time, we’re building solutions that help our customers thrive in a dynamic world. These decisions we make are focused on building a stronger, more resilient company that drives meaningful results for those we serve. That completes our prepared comments.

JL, would you open up the call for questions and answers at this time?

JL, Conference Operator: Thank you. The floor is now open for Your first question comes from the line of Jim Rollison of Raymond James. Your line is open.

Jim Rollison, Analyst, Raymond James: Hey, good morning, Cindy and Lloyd. How are you guys today?

Cindy Taylor, President and CEO, Oil States: Good. Good, Jim. Doing well.

Jim Rollison, Analyst, Raymond James: Cindy, maybe circling back to offshore. Listening to some of the commentary through this earnings season so far, generally, most people seem to have suggested everything still seems to be on the same track there and most of the uncertainty seems to be hitting the shorter cycle markets like The U. S. Land market you mentioned. Just love to hear the kind of color from conversations you’ve had because you made a comment that everything seems to be on track that fits with what everybody is saying.

There have been some talking about some decisions getting pushed into next year just from a timing and because of the uncertainty, but it doesn’t sound like that’s impacting you. Just love to get whatever you could expand on that, if you don’t mind.

Cindy Taylor, President and CEO, Oil States: No, I’d be happy to. And it’s hard for me to speak for other companies on the pushing of projects, but my supposition is likely that this is discretionary type investments could be for drilling offshore drilling rig equipment or a number of other kind of new opportunity sets, whereas ours is much more weighted to production infrastructure associated with these large fields that have already been drilled and discovered. And so this tends to be these are multiyear, multi decade type developments, and we have a lot of individual project visibility that these don’t really derail on short term macroeconomic issues. I think that’s the real difference is probably discretionary, likely more upgrades, drilling rig equipment, consumables versus large project production infrastructure, which has really been the driver primary driver of our backlog growth, although we’ve had several different products, including new products come into our backlog such as our new MPD system. So it’s probably a combination of the type of equipment we offer the market and benefits of new technology brought to market.

Got it. That’s helpful. Before I let I should take the opportunity, too, to say that our bookings outlook remains robust, and we do fully expect that the balance of the year will continue to lead to a book to bill north of one.

Jim Rollison, Analyst, Raymond James: Yes. That’s great to hear. And Cindy, updated view or Lloyd, any updated view on kind of tariff impacts just given a few changes since last quarter?

Cindy Taylor, President and CEO, Oil States: I’m happy. Right now, we just anticipate a material impact from the tariff situation given our variety of global supply sourcing, number one and two, the fact that a lot of our projects can be manufactured anywhere in the world and then they are shipped into international locations. The one area that will probably have modest cost increases is actually in the downhole the perforating side of the business, which, as you know, is rather small for us.

Jim Rollison, Analyst, Raymond James: Yes, absolutely. And last one just on the cash flow, free cash flow outlook. Lloyd, you mentioned kind of reiterated the 65,000,000 to $75,000,000 of cash flow from operations and your CapEx obviously in 2Q was a little more heavy relative to 1Q and my recollection was your kind of annual CapEx guidance was somewhere in the $25,000,000 ballpark. Just trying to circle back on what your CapEx view is so I can we can back into where free cash flow should come out for the full year.

JL, Conference Operator: Yes.

Lloyd Hodgesch, Executive Vice President and CFO, Oil States: Great, Jim. We’re going to guide to CapEx about $30,000,000 because we were a little higher in the second quarter for the completion of the baton and some specific built riser equipment for customer contracts.

Cindy Taylor, President and CEO, Oil States: Yes. And the baton spending was in our plan, but what’s new is this low impact workover riser. And again, this is equipment built for future revenue streams. So perfectly logical that we would up that guided CapEx range for this special spending pursuant to contracts.

Jim Rollison, Analyst, Raymond James: Right. But also wasn’t what wasn’t in your guide necessarily was some additional proceeds from asset sales, which have been at least partially offsetting that incremental $5,000,000 right?

Cindy Taylor, President and CEO, Oil States: That’s correct. And that’s likely to continue as we exit some of these land based operations. We’ll have excess equipment, excess inventory and facilities to monetize. As you know, a lot of that monetization will take time. And so we don’t have that in our forward guidance.

Jim Rollison, Analyst, Raymond James: Yep. Perfect. Thank you, guys. Appreciate it.

Lloyd Hodgesch, Executive Vice President and CFO, Oil States: Your

JL, Conference Operator: next question comes from the line of Patrick O’Leary of Stifel. Your line is open.

Pat O’Leary, Analyst, Stifel: Hey, it’s Pat O’Leary on for Steven Jagaro. Thanks for taking the questions. Your revenue mix was about 72% offshore international during the quarter. Do you have any idea what maybe a normalized mix is given the high grading of The U. S.

Product line?

Cindy Taylor, President and CEO, Oil States: Yes. It’s going that’s a great question. And I probably will break that down a little bit for you in saying that of the 28% current land based mix, about half of that comes from our Downhole Technologies segment. A portion is military, so it’s kind of not what we would think. And then the reality is the Completion and Production Services segment, which if you’ll all recall, has Gulf Of Mexico activity, land based activity and international activity, the land pace piece was really only about 11% or 12% for CP and S, which is really the area that we have done restructuring around.

And so it’s a much smaller piece of U. S. Land driven service activity than probably people recognize.

Pat O’Leary, Analyst, Stifel: Alright. Great. That’s really helpful. Thank you. As you continue to streamline The U.

S. Land operations, could you give us maybe any guidance on the puts and takes of soft current market conditions and your improving cost structure and how that impacts 2H twenty five margins?

Cindy Taylor, President and CEO, Oil States: Yes. I’ll look to Lloyd to kind of look to that and realize that the margin progression will accrete throughout the second half and be higher, quite frankly, into 2026, again, for the reasons I just talked about. These are recent decisions to exit three facilities, severance costs, some have been accrued, some will still come. And then we’ve got some move, relocation, sale of equipment, blah, blah, blah. So there’ll be some ongoing drag on margins.

But the go forward margins, I’ll look more towards 2026, should be in a range of what, Lloyd?

Lloyd Hodgesch, Executive Vice President and CFO, Oil States: Upper 20s to low 30s.

Cindy Taylor, President and CEO, Oil States: Yes. Notable, a doubling of our EBITDA margins by these actions.

Pat O’Leary, Analyst, Stifel: Great. Thanks for the outlook there. I’ll turn it back.

Cindy Taylor, President and CEO, Oil States: Thanks Pat.

JL, Conference Operator: Your next question comes from the line of John Daniel of Daniel Energy Partners. Your line is open.

John Daniel, Analyst, Daniel Energy Partners: Good morning, Cindy and Lloyd. Thanks for having me. The first one is just a housekeeping. Cindy, can you remind me what percent of The US land based business is tied to production versus D and C activity?

Cindy Taylor, President and CEO, Oil States: I’m going to say I attribute virtually everything we do to completions. Remember, we are completely out of flowback and well testing, which you might have said is I can put that in completions too, but we’re completely out of that line. And so I’d say everything we have left is really focused on completion activity, zero drilling.

John Daniel, Analyst, Daniel Energy Partners: Right. Got it. Okay. And the second one, if if you could wave a magic wand and get whatever land based business you wanted, what would that be today and why?

Cindy Taylor, President and CEO, Oil States: Well, we we have our Downhole Technologies, which you can think perforating and plugs. These are Downhole consumables. And while the market has been under competitive pressure, that is a really good long term business to be in, again, because you consume it downhole and you can manage your cost structure a bit more readily than others. Our Tempress product line is absolutely a market leading technology for the drill out of plugs during completion operations, and I would put my money right there.

John Daniel, Analyst, Daniel Energy Partners: Okay. Got it. And then it’s pretty easy for us to see, like, when a frack company shuts down or workover company shuts down. I don’t always see what happens on sort of the the niche y tool businesses, if you will. I’m curious.

Are you seeing any type of headaches with some of your competitors on those those product lines where there might be some What

Cindy Taylor, President and CEO, Oil States: do you mean clarify niche y tools.

John Daniel, Analyst, Daniel Energy Partners: Well, I’m just saying, like, it’s just any type of, like, small tool rental businesses. It’s when you drive around, I don’t know, we write about it. Like, you’ll see, like, a rig yard shut down or a frac yard shut down or a cool TV person shut down, but I don’t often hear about some of the smaller rental companies. And I’m just curious, like, within some of the the markets you compete, are you seeing maybe the competitive dynamics potentially getting more favorable to you because some of your less well capitalized competitors maybe don’t Yeah.

Cindy Taylor, President and CEO, Oil States: Well, I I remember. Right? This is only about eleven or 12% of my revenue mix today And is now I’m just going to throw that out there. So I’m going put the reverse in. You ought to look at what we are doing, which will firm up the market, but it will firm it up for someone else.

Lloyd Hodgesch, Executive Vice President and CFO, Oil States: Right. Right. Okay. Our focus more international and offshore. Correct.

John Daniel, Analyst, Daniel Energy Partners: No. I I know. I’m just stuck as an old man not here. Sorry. Just just digging in.

Okay.

Cindy Taylor, President and CEO, Oil States: The market will firm up, but and there’s lots of discussion about consolidating the land based market, which is overdue. All I’m saying is that’s not gonna be what we do.

John Daniel, Analyst, Daniel Energy Partners: Fair. No. Apparent fair enough. I just thought I’d get your your guys your your wise and experience. I figured I’d test you with the questions.

So thank you for having me. Okay. Thank you, John. You guys. Bye.

JL, Conference Operator: Your next question comes from the line of Chuck Mendervino of Susquehanna. So

Chuck Mendervino, Analyst, Susquehanna: just a couple of questions. Number one, the guidance for the full year, it kind of implies a step up in revenues in the fourth quarter and also EBITDA. So I was just wondering if you could kind of touch on what’s happening there to kind of get to that full year number.

Cindy Taylor, President and CEO, Oil States: No. That’s a very astute observation, and it’s absolutely correct. It is going to be led by our Offshore Manufactured Product segment. And most of it is based on backlog build. And we’ve had a 1.2 year to date book to bill ratio.

And so while you can always worry a little bit of whether they come in the fourth quarter or flip to the first based on material receipts, These are generally POC contracts, and they are generally in backlog. And so but you’re right, there is a step up in Q4 based on that. Got it. And then in

Chuck Mendervino, Analyst, Susquehanna: the Completion and Production segment, I thought it was interesting that such a small piece of that is U. S. Land business, just given the decline year over year in revenues in that segment. So I was just wondering what other aspect of that business kind of saw a sharp decline? Or if you could just explain a little bit what’s going on there.

It sounds like it was maybe was more than just The U. S. Land piece that may have declined.

Cindy Taylor, President and CEO, Oil States: Well, think that the big point that I fear that maybe the Street has missed a little bit is we are in a continual mode of exiting these commoditized product lines started last year, where we had a decent flowback and well testing business, certainly contributed to revenue, but contributed very little to EBITDA and maybe negative cash flow, probably was, that is no longer in our revenue mix. We have also announced, I can’t remember if it’s late last year or early this year, closure of various regions on our CP and S segment in the Northeast, in East Texas and other regions, and we just announced three more. When you do that, yes, revenues come down, but given how marginal these operations were, they’re not damaging our EBITDA, and they’re actually improving our free cash flow.

Chuck Mendervino, Analyst, Susquehanna: Yes. I notice the substantial margin improvement there as well. Okay. That’s all for me. Thank you.

Cindy Taylor, President and CEO, Oil States: Thanks, Chuck.

JL, Conference Operator: Your next question comes from the line of Stephen Gengaro of Stifel. Your line is open.

Stephen Gengaro, Analyst, Stifel: Thanks. Good morning, everybody. Hey, Stephen. I apologize if I missed this because I joined late. But I was curious, on the offshore side and on order flow side, it’s obviously been very good year to date.

It sounds like from talking to others, there’s a potential for a pretty solid uptick in offshore activity in twenty six plus. Are you seeing that? And any thoughts on how we should be thinking about order flow for the next several quarters?

Cindy Taylor, President and CEO, Oil States: No, absolutely. And I think you did miss the comment I made that we are looking at a book to bill north of one throughout the balance of this year and do have optimism as we go into 2026. And we actually had some very good clarifying questions. I think it came from Jim in terms of kind of why are you different, meaning a lot of companies are kind of guiding down. But we’re more long cycle project driven, production infrastructure driven, not less so on shorter term upgrades, refurbs of rig equipment and the like.

I think the rig equipment exposure we have is very strategic and it’s new technology to market, particularly our MPD type assets. And that was a new basically product introduction made early last year. It’s got great reception in the market from a variety of customers, but I would mention Seadrill in particular, which we have some joint marketing videos out there that really talk about the differentiation of the equipment in the market. We have recently introduced a low impact system for P and A operations that we think is unique and improved technology. For older wellheads.

For older wellheads. And it could be any wellhead, but certainly, it has an advantage for older wellheads that elevated our CapEx, but that investment was made pursuant to contracts with customers. And that’s why we upped our CapEx guided from 25,000,000 to $30 But a large proportion of our spending, probably 50%, is unique and expansionary, I. E, the Bataum facility as well as this new intervention riser that we plan to take to market on a rental basis.

Stephen Gengaro, Analyst, Stifel: Great. Thanks. And the other quick question, that’s a little scary because I just look back at my model and it goes back to 02/2001, I think, at the Offshore Products margins over the years. Is that range like when you think about sort of a range in ’25 percent and ’27 you had a nice uptick in the second quarter. Is that kind of give or take 20% range something that we should probably be modeling in for the next year or two?

Or do you think there’s potentially upside to that as absorption maybe I a little

Cindy Taylor, President and CEO, Oil States: would probably model in twenty to

Lloyd Hodgesch, Executive Vice President and CFO, Oil States: twenty two.

Cindy Taylor, President and CEO, Oil States: Twenty to twenty two. We have a five year model. And obviously, what a real driver for improved margin is steady, consistent throughput through our facilities. But as backlog builds, we should get that. There’s always some mix issues depending on which product has the higher weighting in a given quarter.

But overall, and you’ve been with us a long, long time, probably our historical margins over two decades in that segment were somewhere from about 13% to 17 And now we and if you look over the last five years, our revenue growth, our EBITDA growth and our margin progression has been very favorable in that segment. And now we’re more sustained and have been around kind of 19% to 20%. But if revenue continues to grow and expand as we think it will, those could accrete up to 21% to 22% over time.

Stephen Gengaro, Analyst, Stifel: Great. That’s great color. Thank you.

Cindy Taylor, President and CEO, Oil States: Thank you.

JL, Conference Operator: Thanks, David. That concludes our Q and A session. I will now turn the conference back over to Cindy for closing remarks.

Cindy Taylor, President and CEO, Oil States: All right. JL, thank you so much for helping us host the call today. And I do thank all of you for your time and joining us. We attempted to communicate during this call is that we are focused on the right end markets. We’re getting leaner by design and we’re being more selective about our capital allocation strategies.

With that backdrop, we expect to see higher EBITDA margins and enhanced cash flows, all efforts that should benefit our stockholders. Thanks and have a great day.

JL, Conference Operator: This concludes today’s conference call. You may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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